Singapore shares slide after grim US manufacturing report with STI down 1.2%

10/02/2019

SINGAPORE – Singapore shares deepened its slide on Wednesday afternoon (Oct 2), as a shock slump in US manufacturing activity spooked investors and renewed fears of a global economic slowdown.

The Straits Times Index sank 1.2 per cent, or 39.15 points to 3,106.88 as at 1pm, following the midday break.

This comes after Wall Street stocks sank overnight, as the disappointing US manufacturing data stoked fears that the US economy could soon tip into recession. The broad-based S&P 500 shed 1.2 per cent, notching its biggest one-day fall since August, while the Dow Jones Industrial Average ended down 1.3 per cent, and the tech-rich Nasdaq Composite Index fell 1.1 per cent.

The ISM’s (Institute for Supply Management) index fell 1.3 points to 47.8 per cent in September, the lowest since June 2009, and well below the 50 rating that separates growth from contraction. The institute cited trade tensions between the world’s two largest economies as the biggest factor for the largest contraction since the end of the 2007-2009 recession.

On the Singapore Exchange, decliners outnumbered advancers 207 to 95, on a churn of about 332.1 million shares worth $388.3 million.

Among the most heavily traded by volume, Yangzijiang Shipbuilding plummeted 5.5 per cent, or 5.5 cents to 94.5 cents, with 55.4 million shares traded, while Golden Agri-Resources tumbled 2.2 per cent, or 0.5 cent to 22.5 cents, with 34.6 million shares traded.

Banking stocks also continued to nurse losses in the afternoon trade, with DBS down 1.6 per cent, or 40 cents to $24.84, United Overseas Bank losing 1.4 per cent, or 35 cents to $25.55, and OCBC Bank sliding 1.7 per cent, or 19 cents to $10.80.

Amid a sea of red, Sembcorp Industries fell 3.3 per cent, or seven cents to $2.06. The comes after the mainboard-listed company on Wednesday announced that it has signed an agreement to sell the commercial construction business under its subsidiary to Chip Eng Seng Corp’s unit for about $49.9 million.

Venture also dipped 2.6 per cent, or 41 cents to $15.41, while Singapore Press Holdings lost 2.4 per cent, or five cents to $2.08.

The only bright spot among the STI constituents was Mapletree Commercial Trust, which rose 1.3 per cent, or three cents to $2.32.

Other Asian markets pulled back on Wednesday. Japan’s Topix index fell 0.5 per cent as at 12.20pm, while Hong Kong’s Hang Seng slipped 0.3 per cent. South Korea’s Kospi also declined 1.3 per cent, and Australian stocks shed 1.2 per cent.

That said, Oanda Asia Pacific senior market analyst Jeffrey Halley noted: “Amidst all the doom and gloom from the US and Europe, many other countries around the world refused to let the rain fall on them. The Markit Manufacturing PMI’s of Great Britain, Indonesia, Myanmar, Vietnam, Thailand, Taiwan, Malaysia, the Philippines, Mexico, Brazil and yes, the United States, all rose yesterday.

“As investors looked at the ISM (Institute for Supply Management) headline and hung their heads in despair, I would argue the picture isn’t so black and white,” added Mr Halley.